How much should you invest in your brand?
A big part of running any serviced-based business is dealing with potential customers; beginning conversations and sharing knowledge that will help both parties make a decision as to whether they want to work together. One of the things that comes up most often during this process is ‘How much is wise to invest in marketing and branding?’.
An estimated 4.1 million people are ‘freelancing’, or side ‘hustling’, or whatever-you want- to-call-it, in Australia (that figure is from 2014; I would expect the number is much higher now), more and more people are starting up their own businesses, both small (more than 1 person) and micro (1-person).
Such ventures are often built on a shoestring (I’ve certainly done this myself). When you’re starting out, potential costs are lurking everywhere: legal, tax, insurance/s and, definitely the most ‘visible’ activity when kicking off a business: marketing and branding. So just how much is the right amount to invest?
Free, or cheap, is everywhere
Interestingly enough, the growth of small and micro businesses has generated its own ecosystem. As we look to outsource tasks, the first and often best place to look for a small business is to likeminded small and micro service providers. This is a good thing for limited budgets, as the skills and capabilities you need are more accessible than ever as the number of small and micro businesses rise.
Whilst the average spend of startups isn’t typically much, the sheer weight of numbers has stimulated the development of a raft of services and solutions, many tech-based, that can assist micro businesses, often for free. For example, apps like Wave, Toggl are imperative to the productivity of Amadeus Brand. Their paid versions look amazing, but their free options are just fine for the moment. Their business strategy undoubtedly hinges around luring me into paid options as my business scales. There are countless services and SaaS's (software as a service) like this everything, from to project management to image creation.
When it comes to marketing and branding, freelancing platforms like Upwork, eLance and Fiverrr offer cheap-as-chips ways to cover marketing and branding activities. Ironically, they enrich the ecosystem by connecting freelancers with startup businesses, often on a shoestring. The cheapest labour on these sites are often located off-shore, where minimum wages are typically much less than our fair shores, and you can engage talent at about a third of the cost of a local freelancer, if not less. For web design and development, sites like Wix, Weebly and Wordpress offer robust options for non-tech people who are happy to DIY for a fraction of the price of hiring a web developer. It’s a tempting option for the budget-conscious business.
So is it wise to go cheap with marketing and branding? It depends. Let’s take a look at the following dimensions (that all conveniently begin with the letter 'C').
Put simply, how complex is the group of people you are marketing to?
You can consider three ways:
- The nature of your goods or service that you provide: how simple or complex is the ‘solution’ that you are providing your audience
- The accessibility of your audience: are they demographically easy to pinpoint?
- The complexity of your audience: are their needs easy to articulate and understand?
Let’s take an independent family law mediator. A core segment of their market are couples who are experiencing, or anticipating experiencing, a significant change to the family unit that requires resolution on sensitive issues such as parenting and property matters. The audience needs and an optimal solution is pretty easy to pinpoint: families want to be able to move on harmoniously from such an event, and a family law mediator can help achieve this outcome. Demographically, this group is quite easy to pinpoint, and there are statistics that are readily available to find this sort of stuff out.
Answering these questions can get a bit more complex for services, particularly in Business to Business (B2B) markets where ‘buyer’ sets are not always homogenous and it may take some deep thinking and dedicated marketing nous to come up with meaningful answers to these questions.
Finally, as a rule of thumb, your level of marketing and branding investment should increase proportionally the more complex the task is to reach your audience.
Start by asking of your business:
- How do you need to connect with your market?
- What’s the best way to reach them?
What is the most straightforward pathway to your audience? (Funnily enough, the pathway is often anything but). The answer to this question relies on a solid understanding of who your audience is, where they hang out and what modes of communication will resonate with them. There are a myriad of ways – social media, direct mail, PR – the list is endless and entirely dependent on your business. If the path to your audience is clear and looks easy to navigate then there’s an opportunity to save costs. If your needs are more complex, or your operating in a cluttered or highly competitive environment, then the extra investment may be worth your while.
Let’s take a freelance accountant. Being a high-trust service, relationships are probably going to be critical, and they may expect to receive a bulk of your business through word-of-mouth. So, how could they strengthen the bond with their clients and potential audience? How could marketing and branding enhance this process? I’d expect that a good content marketing strategy could work; positioning themselves as an expert and building credibility amongst their audience to position themselves a person that they can trust with their books.
Is this activity low-cost? It depends on the next two dimensions: capacity and capability.
It’s an age old conundrum: you could save money by investing your time, or you could save time by investing your money. At the end of the day, how much time, or resources, do you have available to you?
If you’re startup is a slow-burn and (1) you’re not encountering any pressure to create turnover and (2) you or other team members are happy to sink some time into nutting stuff out yourself, then you’re in a good position to save some costs. The deep resource pool that is the Internet offers literally millions of ways to figure out your own answers to pretty much any marketing challenge. You may still need to invest in more creative areas where you may need some outside talent, but you’ll be in a good position create a robust brief when you’ve developed a solid marketing strategy.
Finally, ask yourself honestly, do you have the skills to do justice to your fledgling business, and, will your output be good enough to communicate your brand messages and market your capabilities? Will it be worth the ‘grey hair tax’ that accompanies it? If you have the marketing and brand capability - alongside capacity - then you're in a sound position to take this on yourself and free up your investments for other things.
I often recall a story about the founder of a very high-end professional services consultancy, whose client list includes some very large ASX-listed companies, who spent over a month ‘tweaking’ his logo and DIY website. When you consider the hefty rate this guy is able to command per hour (with skills very far removed from branding and web design), its fair to say that his time could have been better used in other areas of the business that would have generated cash more quickly at this stage of his startup.
Have you invested money in your business brand? How did it go?
Let me know in the comments below!